Come along for the ride

I’m not sure if you’ve ever thought about building a digital product, but I have. Sure, I have a blog and a podcast and those could be called digital products. But I’m talking about selling an information-based product online.

If you know the story of how this podcast helped lead to a book deal, then you know that my original intent with the book content was to create and sell my very own ebook. Once one thing led to another, it was out of my hands and things were official, not something that I was controlling as an entrepreneur.

So since then, and especially since going out on my own in late 2011, I’ve been planning on offering a paid digital product at some point. As I covered a few weeks ago, I think we are at a new dawn of digital learning, and that the tools to enable entrepreneurs to flourish are only going to get better.

So I invite you to come along for the ride as I become a guinea pig for this, so that you can learn from my mistakes (and hopefully triumphs).

Note: If you’re coming here from listening to the podcast, I’ll cut right to the chase:

I urge you to subscribe to the podcast on iTunes or play the entire show above, but below is a summary of what I cover.

10 things to know when building your first digital product

1. What is a digital product?

To me, a digital product is an online class, ebook, video, screencast, or webinar that a teacher with a particular knowledge in a niche creates once and then offers to people online, who pay to take a course. One example might be an author that creates a PDF eBook called “The amazing vegetarian workout diet.” Another might be a programmer that does a video course called “How to build an app for the iPhone.” Or a marketer that does a webinar on how to use LinkedIn to find your dream job.

2. Why a digital product?

I believe that digital products are a crucial part of the overall salary for the modern entrepreneur.

Yes, there are some businesses that will stick to one product… I’m actually having a hard time thinking of one. But lets say there is a store called Just Candles and, you guessed it, ALL they sell is candles. That’s it. No matches. No candle holders. No candle making classes. No books about candles. The only way they get revenue is through the sale of candles from 9 to 5, and then they go home.

However, much more common is multiple revenue streams. What’s interesting is that most businesses have multiple revenue streams. Think of Apple selling computers at retail, to businesses, and schools, doing training, selling software, selling music, and so on. Or ESPN, who brings in money through not just television, radio, web, and magazines, but also has ESPN Zone restaurants, entertainment complexes, events like the XGames and ESPY awards, and more.

Strangely, most full time workers rely on a single source of income — their job. While that is fantastic when everything is good, all it takes is a layoff to throw things into chaos. Meanwhile, an entrepreneur can spread their income amongst many projects or clients, so that if one fails, they can diversify among the rest.

For me, I am looking to have a product (salary negotiation) available at many different price points (going from low to high):

3. Six advantages of a digital product

a. It fits into the product plan
A digital product around $99 would fit nicely between classes and 1:1 consulting

b. Another way for people to learn
Some learn from reading books quietly alone, others from a classroom experience, and others 1:1. This gives the option of self-paced learning on the computer.

c. Available 24/7, around the world
If I am teaching a class in Manhattan, some can’t attend because of work, but others can’t attend because they live thousands of miles away. An online product means anyone can take my class at any time.

d. Create once, monetize many times
It might take you a week, a month, or half a year to create a high-quality class with all the lectures you want to deliver, but once it’s done, you can market and monetize many times over, but not have to put additional effort in.

e. Revenue and marketing
I am creating my class with two goals in mind… one is to create direct revenue, while the other is to use the classes as a marketing tool. Because the creation of a class is a sunk cost, and selling 1 or 100 more classes only affects revenue not costs, you can offer discounts to key contacts. This might be a friend that you want to help out, or to 50 students as a “value-add” in an overall consulting situation.

f. Make money in while you sleep
This is the ultimate goal, right? To go to bed in your studio apartment in the city (or seaside villa in Tuscany) and when you wake up, you have 15 or 20 emails saying that $1500 was deposited in your Paypal account overnight from product sales.

4. What is your content?

By now you should know what your content is going to be, but don’t worry if you’re just starting out. There are many resources to find out, but you want a combination of what you are passionate about, what you are good at, and what people will buy. Try to go after an audience of fanatics (golfers, Harry Potter fans, Pinterest users) or people with a problem to solve (weight loss, bedbugs, lack of sleep, etc).

Make sure to invest in good design, and know your subject inside and out.

5. Get the skills

Match the type of digital product to what your skills are. If you’re already a great writer and blogger, then write an ebook. If you’re a pro with video editing, do a video series. It’s worth it to become fluent in tools such as Powerpoint, Photoshop, web development, Camtasia or Screenflow, and Final Cut Pro.

6. Formulate a plan

Lay out a marketing plan for your product. For me, the initial goal was to do a practice version for free, and then either use that to drive sales of other products, or to roll it into the final product. When do you plan to launch? Who are you targeting? How will you spread the word?

7. Evaluate platform options

In my “digital learning” post, I look at Udemy.com and Ruzuku.com for online courses. I also just heard of moodle.org, which is good for test-based classes.

There are a lot of resources if you want to do an eBook, a webinar, or other forms of product.

8. Creating the lectures

Now it’s time to build the product. For me, I’ve been covering the topic of salary negotiation intensely for more than 2 years, so I was comfortable with the topic. I spent about a full day creating the first module in PowerPoint and developing 10 negotiation myths. Then maybe another 3-5 hours fine-tuning the layout and design.

From there, I put my nose to the grindstone and worked from 9pm till 3am on a Friday night, with about 2-3 hours to record everything on video, then 2 hours to edit everything, and to 30 minutes to export all the files.

The next day, I spent several hours posting everything on Udemy. While the interface and entire product is easy to use, adding things like your bio, course descriptions and so on are time-consuming the first time through.

I also applied to become a paid instructor. This appears to be a formality to add your Paypal account and take you through a series of opt-ins. The opt-ins are either very cool, or somewhat intrusive, depending how you look at them. They offer you the chance to let Udemy take control and market your course to other users, offering a discount if needed. Another is letting other people sell your product as an affiliate, and the third is using your product in their advertising.

This comes down to a simple tradeoff.. do you want full control of your product and its marketing, or are you ok giving up some control if it can bring in more revenue?

9. Involving your users

Now it’s time for YOU to get involved.

I would sincerely appreciate it if you could head over to Udemy and check out my “beta” course. This will serve a few purposes:
a) You get to see what Udemy is all about and how this online teaching really works
b) You might learn a little bit about salary negotiation
c) You’d be part of a community providing valuable feedback for my future product

In return, I will continue to report on the success or failures of my experiments, which will allow you to have better learnings. Also, I will offer a significant discount for Hopkinson Report users once the product is done.

– Do you like the format (of both Udemy and my course)?
– Any technical issues?
– Does the intro make you curious to buy additional products?
– What questions with salary negotiation would you like answered?
– What modules would you like to see included in this course? (see below)
– What should be the price of the full course? (see below)

10. Next steps

The next steps for me can be broken down as follows:

– Get feedback from users, my followers, and friends

– Create the 3 additional modules (Negotiating a new job, Negotiating a raise, Negotiation for freelancers)

– Decide on including the mindset in the overall course, or leaving as a standalone freebie to drive sales (undecided)

– Set pricing
I am leaning toward $99 or $97 for a full course, based on what other similar packages are offering. Other options are $49, $79, $149. Prices would vary depending if there were 3 mini courses, or one large one.

Conclusion

I’m glad to have my readers and podcast listeners along for the ride. Thank you in advance for your help.

Note: I am not compensated in any way by the companies in this post. I am testing them as a platform for my own products, and will follow their fee structure like any other customer.

Sponsor Message: Freshbooks Fresh Take of the Week: So my fresh take this week is that I recorded this on my birthday (a Sunday). Two notes on that… first is that as of 10pm 72 out of 795 friends have posted on my Facebook wall to wish me Happy Birthday. I find that sort of incredible. That dozens of people are able to wish you happy birthday with a few clicks of the mouse. Social media, baby.

And the second is that this is the life of an entrepreneur. There are no days of work and days off. There are just days. So as much as I love bragging about taking naps and sipping coffee and jetting around the world, the truth is, there are bust your butt moments when you work till 3am (like last Friday night) or for a few hours on your birthday at the end of a weekend because you wanted to get a post up last week but couldn’t get to it. But who knew I’d be an entrepreneur at this point in my life.

One thing that truly helps me as an entrepreneur is by using Freshbooks for my online invoicing. For more info, take the tour at Freshbooks.com.